When Julie Gillard, MP, the new Australian Labour Party Deputy Prime Minister and Minister for Education, Employment, Workplace Relations and Social Inclusion, opened the recent AFR HE conference, her speech was praised as being the “most positive in 12 years”. Gillard’s speech combined a rousing attack on the conservative Howard government’s policies towards higher education, and society generally, with the promise to usher in “a new era of cooperation…For the first time in many years, Australian universities will have a Federal government that trusts and respects them”. But, are the universities reading the tea-leaves correctly?

Because attention is focused on higher education as a vital indicator of a country’s economic super-power status, universities are regarded as ‘ideal talent-catching machines’ with linkages to the national innovation system. Australia, a big country with a small population, is realising that its global ambitions are constrained by accelerating competition and the vast sums which other countries and regions, e.g., Europe and the US, seem able to invest.

In response, Ian Chubb, Vice Chancellor, Australia National University (pictured to the left), says the government should abandon its egalitarian policies and preferentially fund a select number of internationally competitive universities while Margaret Gardner, Vice Chancellor, RMIT University, says Australia needs a top university system.

Australia may be able to reconcile these competing and divergent views through more competitive and targeted funding linked to mission (see below on compacts) or, perhaps more controversially, by using the forthcoming HE review (see below) to reaffirm the principles of educational equity while using the complementary innovation review to build-up critical mass in designated fields in select universities. Whichever direction it chooses, it needs to ensure pursuit of its slice of the global knowledge society doesn’t simply become advantageous for the south-east corner of its vast landscape.

Indeed, those who argue that government should fund institutions on the basis of their contribution to the economy and society may find that the metrics used are less kind to them than they think. Not only does research suggest some universities over-inflate their claims, (see Siegfried et al, ‘The Economic Impact of Colleges and Universities’) but better value-for-money and social return on investment may be achievable from improving pre-school or primary education, job chances for 16-19 year olds, building a hospital, or other large-scale facility in the vicinity. Another possibility, in a country which ostensibly values egalitarianism and is committed to balanced regional growth, is that universities ranked lower may become preferred beneficiaries at the expense of more highly ranked institutions. This is exactly the argument that underpinned the first Shanghai Jiao Tong ranking; in other words, the team was anxious to show how poorly Chinese universities were doing vis-à-vis other countries. While Australia’s Go8 universities may seek to use this argument to their advantage, they should also be mindful that poor rankings could incentivize a government to spend more financial resources on weaker institutions (see Zhe Jin and Whalley, 2007). Or, rather than using citations – which it could be argued refers to articles read only by other academics – as a measure or metric of output, impact measurements – including community/regional engagement – could be used to measure contribution to the economy and society. This format may favor a different set of institutions.

The Australian government has begun a review of its HE system. One likely outcome will be the use of negotiated ‘compacts’ between universities and the government which will, in turn, become the basis for determining funding linked to mission and targets. The concept was initially presented in the Australian Labour Party white paper Australia’s Universities: Building our Future in the World (2006):

The mission-based compacts will facilitate diversification of the higher education system, wider student choice and the continuation of university functions of wider community benefit that would otherwise be lost in a purely market-driven system.

Broadly welcomed, these ‘compacts’ are being wildly interpreted as a method of institutional self-definition, on the one hand, or a recipe for micro-management, on the other. They appear to share some characteristics of the Danish system of performance contracts, mentioned in the University Act of 2003 (see section 10.8), and are in line with a trend away from government regulation to steerage by planning. The actual result will probably be somewhere in-between.However, given the time and resources required on both sides to ‘negotiate’, it seems clear this may not be the panacea many universities believe it to be. How much institutional autonomy or self-declaration is realistically possible? At what stage in the negotiations does the government announce the ‘end of talking’?

Another reality-check may be in store as Australian universities celebrate replacement of the Research Quality Framework with the new Excellence in Research for Australia (ERA) initiative which combines metrics with peer evaluation. Whatever arguments against the previous system, several HE leaders claim they had reached a point of near-satisfaction about how research was to be measured, including measuring not just output but also outcome and impact. These issues may need to be re-negotiated under the new system. Another unknown is the extent to which the ‘outcome’ of the ERA itself is linked to ‘compacts’ and research prioritization and concentration – with implications not just for existing fields but new fields of discovery and new research teams.

The challenges for institutions and governments are huge, and the stakes are high and getting higher. To succeed, institutions need to employ the same critical rigorous approach to their arguments that they would expect from their students. Universities everywhere should take note.